Sturm, Ruger & Company, Inc. · NYSE:RGR
Sturm, Ruger & — Shareholder Meeting (May 2015)
72 slides from Sturm, Ruger &'s shareholder meeting presentation, May 5, 2015
Slide 1: 2015 Annual Meeting
RUGER 2015 Annual Meeting QD ster. nucinsco.ine. | Lacey ace | soureons ConnEcricUT 0690 USA
Slide 2: Caution: Forward Looking Statements
Caution: Forward Looking Statements Statements made in the course of this meeting that state the Company’s or Management’s intentions, hopes, beliefs, expectations or predictions of the future are forward - looking statements. It is important to note that the Company’s actual results could differ ma
Slide 3: Overview
Overview
Slide 4: Investment Highlights
• 66 years as one of the world’s leading firearms brands. • Experienced and engaged Board of Directors. • Strong management team. • # 1 or # 2 market position in our major categories: pistols , revolvers and rifles. • Strong balance sheet and operating results. Investment Highlights NYSE: RGR Shares
Slide 5: Company Profile
Company Profile • Trailing 12 - months ending March 28, 2015: • Sales : $512 Million • Operating Profit: 16% • EBITDA: 24% • EPS : $ 2.81 • EBITDA per Share: $ 6.29 • 1,850 non - union employees, 250 temporary employees . • Investment casting and metal injection molding divisions. • Manufacturing fa
Slide 6: Financial & Operating Highlights
Financial & Operating Highlights
Slide 7: Quarterly Production (in Thousands of Units)
Quarterly Production ( in Thousands of Units) 50 150 250 350 450 550 650 2012 2011 2010 2009 2008 2007 2013 Q1 2015 2014 10,000/day 6,000/day
Slide 8: Quarterly Production vs. Shipments
Quarterly Production vs. Shipments (in Thousands of Units) 50 150 250 350 450 550 650 2012 2011 2010 2009 2008 2007 2013 Q1 2015 2014 Shipments Production
Slide 9: Quarterly Sell-Through (in Thousands of Units)
Quarterly Sell - Through (in Thousands of Units) 50 150 250 350 450 550 650 2012 2011 2010 2009 2008 2007 2013 Q1 2015 2014 Estimated Sell - Through
Slide 10: Five-Year Consolidated Operating Results
5 - Year Consolidated Operating Results 2014 2013 2012 2011 2010 Sales Growth - 21% 40% 50% 29% - 6% Gross Margin 31% 38% 36% 34% 33% Operating Margin 18% 25% 23% 19% 17% EBITDA % 25% 28% 26% 23% 21% Inventory Turns 4.2 6.7 5.6 4.5 3.5 New Product % of Total Sales 16% 29% 38% 30% 25% Adjusted NICS C
Slide 11: Quarterly Financial Results
Quarterly Financial Results (in Millions, Except EPS) 2015 2014 Q1 Q4 Q3 Q2 Q1 Revenues $137.0 $122.6 $98.3 $153.7 $169.9 Gross Margin $41.4 $34.0 $23.7 $50.4 $61.1 Operating Profit $23.8 $16.3 $10.0 $33.0 $38.0 17% 13% 10% 22% 22% EPS $0.81 $0.53 $0.34 $1.12 $1.22 EBITDA $33.2 $26.1 $19.6 $42.1 $47
Slide 12: Five-Year Return
5 - Year Return $- $150 $300 $450 $600 $750 $900 2009 2010 2011 2012 2013 2014 Ruger $407.23 S&P 500 S&W Recreation Source: Value Line Publishing LLC: Factual material is obtained from sources believed to be reliable, but the publisher is n ot responsible for any errors or omissions contained herein
Slide 13: Five-Year Return
5 - Year Return $- $150 $300 $450 $600 $750 $900 2009 2010 2011 2012 2013 2014 May 1, 2015 Stock Price $54.86 $9.70 $73.09 $34.63 Source: Value Line Publishing LLC: Factual material is obtained from sources believed to be reliable, but the publisher is n ot responsible for any errors or omissions co
Slide 14: Return on Equity: Net Income
Return on Equity: Net Income ( in Millions) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% $0 $20 $40 $60 $80 $100 $120 2006 2007 2008 2009 2010 2011 2012 2013 2014 $64 Note: Excludes the impact of the 2014 defined benefit pension termination expense.
Slide 15: Return on Equity: Net Income vs. ROE
Return on Equity: Net Income (in Millions) vs. ROE 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% $0 $20 $40 $60 $80 $100 $120 2006 2007 2008 2009 2010 2011 2012 2013 2014 35.1% Note: Excludes the impact of the 2014 defined benefit pension termination expense.
Slide 16: Market Conditions
Market Conditions
Slide 17: Trends in Retail Demand
Trends in Retail Demand 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 8 10 12 14 16 18 20 22 24 NICS Checks (in Millions) Sell - Through (in Thousands) Ruger 165% Growth Since 2008 NICS 46% Growth Since 2008 2010 2009 2008 2013 2012 2011 2014 The adjusted National Instant Criminal Background Che
Slide 18: Import Data (Handguns)
Import Data (in Thousands of Units of Handguns) 2013 2014 0 100 200 300 400 500 600 700 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Austria Croatia Germany Brazil Italy
Slide 19: Import Data (Handguns)
Import Data (in Thousands of Units of Handguns) 2013 2014 0 100 200 300 400 500 600 700 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Ruger (All Firearms) Austria Croatia Germany Brazil Italy
Slide 20: Market Share Movement
Market Share Movement 2013 2012 Revolvers Single - Action Maintained Maintained Double - Action Gained Gained Pistols Rimfire Gained Gained Centerfire : Full - Size Maintained Maintained Centerfire : Compact Maintained Maintained 1911 Gained Gained Rifles Mini - 14 Rifles Maintained Maintained Bolt
Slide 21: Market Share Movement
Market Share Movement 2014 2013 2012 Revolvers Single - Action Maintained Maintained Maintained Double - Action Maintained Gained Gained Pistols Rimfire Maintained Gained Gained Centerfire : Full - Size Maintained Maintained Maintained Centerfire : Compact Lost Maintained Maintained 1911 Maintained
Slide 22: New Product Development
New Product Development
Slide 23: New Product Impact
New Product Impact (in Millions) $0 $100 $200 $300 $400 $500 $600 $700 2010 2011 2012 2013 2014 $182 $99 $62 $485 $324 $252 $196 $679 38% 30% 25% 29% New Products Mature Products $89 $542 16%
Slide 24: Highlighted New Products 2014 & YTD 2015
Highlighted New Products 2014 & YTD 2015 4 New Platform Products Firearms: AR - 556 / LC9s Accessories: BX - Trigger / AR - Trigger 25 New Product Derivatives Including the LCP Custom / 9E / Lightweight SR1911 22 Charger Pistol / Mini - 14 in 300 BLK / 10/22 50 th Anniversary Rifle Ruger Collector’s
Slide 25: Ruger AR-556
The Ruger’ AR-556 is a Semi-Automatic, M4-style, Direct Impingement Modern Sporting Rifle
Slide 26: Ruger LC9s and LC9s Pro
The Ruger’ LC9s: and LC9s: Pro are Striker-Fired and feature a Short, Light, Crisp Trigger Pull.
Slide 27: Ruger LCP Custom
The Ruger’ LCP’ Custom features a Wide Aluminum Trigger, Photoluminescent Sight and Stainless Steel Guide Rod. A ra
Slide 28: Ruger 9E
The Ruger’ 9E features everything you need, and nothing you don't.
Slide 29: Ruger SR1911 Lightweight Commander
The Ruger’ SR1911 is now available in a Lightweight Commander-Style model.
Slide 30: Ruger 22/45 LITE
The Ruger 22/45 LITE is now available in a Blue Ventilated Barrel model.
Slide 31: Ruger Charger Pistol
The Ruger: 22 Charger’ Pistol is reintroduced in a Brown Laminate and Takedown model.
Slide 32: Mini-14 Tactical
The Mini-14 Tactical is now available in 300 AAC Blackout. | oe
Slide 33: Gunsite Scout Rifle Composite Stock
The Ruger’ Gunsite Scout Rifle is now available with a Composite Stock. Q
Slide 34: Gunsite Scout Rifle in 5.56 NATO
The Ruger’ Gunsite Scout Rifle is now available in 5.56 NATO.
Slide 35: Ruger 10/22 50th Anniversary Rifle
(% RUGER 7 10/22, S The Ruger’ 10/22’ 50th Anniversary Design Contest Winning Rifle is a fun, versatile rifle that firearms enthusiasts of all ages are sure to enjoy. Q
Slide 36: Ruger Collector's Series 10/22 Carbine
The Ruger Collector's Series 10/22° Carbine comes with a host of Commemorative 50th Anniversary Materials
Slide 37: Ruger American Rifle
The Ruger American Rifle’ is now available in Predator, Ranch and Left-Handed models.
Slide 38: Ruger American Rimfire Rifle
The Ruger American Rimfire’ rifle is now available with a Threaded Barrel.
Slide 39: Ruger Hawkeye FTW Predator Rifle
The Ruger’ Hawkeye’ FTW Predator rifle is the perfect match of features from the popular Gunsite Scout Rifle and the Hawkeye’ Predator rifle.
Slide 40: Ruger 77/17
The Ruger 77/17 is now available in .17 WSM. =
Slide 41: Ruger LCRx
The Ruger’ LCRx is now available with a 3-inch Barrel and Adjustable Sights.
Slide 42: Ruger LCR in 9mm Luger
The Ruger’ LCR is now available in 9mm Luger.
Slide 43: Ruger SP101 in .327 Federal Magnum
The Ruger SP101 is now available in .327 Federal Magnum. = = y
Slide 44: Accessory Products
Accessory Products Elite 452 AR-Trigger BX-Trigger’ BX-15 Magazine
Slide 45: Recognition & Media Coverage
Recognition & Media Coverage Q
Slide 46: Consumer Awards & Recognition
Consumer Awards & Recognition
Slide 47: Industry Awards & Recognition
Industry Awards & Recognition
Slide 48: Editorial Coverage
Editorial Coverage
Slide 49: Editorial Coverage
Editorial Coverage SPECIAL ISSUE PALM-sIZED PROTECTIONIN.380 Se
Slide 50: Editorial Coverage
Editorial Coverage
Slide 51: Editorial Coverage
Editorial Coverage 00
Slide 52: Web Editorial Coverage
Web Editorial Coverage Ruger Makes Mini-14 Tactical Rifle Available in 300 Blackout
Slide 53: Social Media Presence
Social Media Presence Find us on ° Facebook Pinterest Youuilis ustagroun Broadcast Yourself™
Slide 54: The 2011 Ruger
THE 2011 RUGER’ BAEEION@)
Slide 55: The 2011 Ruger
THE 2011 RUGER’
Slide 56: The 2015 Ruger
THE 2015 RUGER MILLION (@)
Slide 57: Liquidity
Liquidity
Slide 58: Inventory Reduction
Inventory Reduction (in Millions) Raw Material & WIP $- $20 $40 $60 $80 $100 $120 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Slide 59: Inventory Reduction
Inventory Reduction (in Millions) Raw Material & WIP Finished Goods $- $20 $40 $60 $80 $100 $120 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Slide 60: Inventory Reduction
Inventory Reduction (in Millions) Raw Material & WIP $- $20 $40 $60 $80 $100 $120 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Improvement in inventory turns during the past 5 years reduced inventory by $19 million. Finished Goods
Slide 61: Quarterly Finished Goods Unit Inventory
Quarterly Finished Goods Unit Inventory (in Thousands) 0 50 100 150 200 250 300 350 400 Ruger 51,100 2012 2011 2010 2009 2008 2007 2013 Q1 2015 2014
Slide 62: Quarterly Finished Goods Unit Inventory
Quarterly Finished Goods Unit Inventory (in Thousands) 0 50 100 150 200 250 300 350 400 Ruger 51,100 Distributors 262,000 2012 2011 2010 2009 2008 2007 2013 2014 Q1 2015
Slide 63: Quarterly Finished Goods Unit Inventory
Quarterly Finished Goods Unit Inventory (in Thousands) 0 50 100 150 200 250 300 350 400 Ruger 51,100 Target Distributor Inventory At 6 turns = 260,000 2012 2011 2010 2009 2008 2007 2013 2014 Distributors 262,000 Q1 2015
Slide 64: Quarterly Distributor Inventory Turns
Quarterly Distributor Inventory Turns 0 5 10 15 20 25 30 35 40 Q1 2015 6 Turns Q1 2013 39 Turns 2012 2011 2010 2009 2008 2007 2013 2014 Q1 2015
Slide 65: Capital Allocation
Capital Allocation (in Millions) Capital Expenditures $55 Regular Dividend $41 2013 $96 Capital Expenditures $46 Regular Dividend $31 2014 $77
Slide 66: Variable Quarterly Dividend
Variable Quarterly Dividend (in Millions) $- $2 $4 $6 $8 $10 $12 $14
Slide 67: Shareholder Return
Shareholder Return Since early 2007 , • W e have returned $272 million to our shareholders: • Stock Buyback $64 Million • Special Dividend $ 87 Million • Regular Quarterly Dividend $121 Million • W e invested $201 million on capital expenditures to grow the business. • O ur market capitalization inc
Slide 68: DB Pension Termination in Q4 2014
DB Pension Termination in Q4 2014 • In December 2007 we froze the D efined Benefit Pension Plans and enrolled all employees into a 401k. • In December 2014 the Defined Benefit P ension P lans were fully f unded and terminated. • The termination expense was $41.0 m illion, of which the c ash o utlay
Slide 69: Investor Communications
Investor Communications We anticipate releasing 2015 quarterly earnings and holding investor conference calls on the following dates: Earnings Release Conference Call Q2 2015 July 29, 2015 July 30, 2015 Q3 2015 November 4, 2015 November 5 , 2015 Q4 2015 February 24, 2016 February 25, 2016
Slide 70: Investment Highlights
• 66 years as one of the world’s leading firearms brands. • Experienced and engaged Board of Directors. • Strong management team. • # 1 or # 2 market position in our major categories: pistols , revolvers and rifles. • Strong balance sheet and operating results. Investment Highlights NYSE: RGR Shares
Slide 71: Questions
Questions
Slide 72: Caution: Forward Looking Statements
Caution: Forward Looking Statements Statements made in the course of this meeting that state the Company’s or Management’s intentions, hopes, beliefs, expectations or predictions of the future are forward - looking statements. It is important to note that the Company’s actual results could differ ma